The Government will not push through proposals that churches argue would restrict their ability to deny jobs to gay people and transsexuals, Equality Minister Harriet Harman has confirmed.

LGBT Christian movement 'dismayed' at gay Bishop block

The Lesbian and Gay Christian Movement has expressed "dismay" at the decision of the Crown Nominations Commission to block the appointment of Dr Jeffrey John, as Bishop of Southwark.

The Rev Sharon Ferguson, Chief Executive of the Lesbian and Gay Christian Movement (LGCM) voiced her frustration and disappointment that for the second time Dr Jeffrey John has "had his sexuality made the stumbling block" to his appointment as a Bishop in the Church of England.

Following a leak that Dr John was one of the candidates for the post of Bishop of Southwark, conservative opponents quickly denounced him, claiming that his appointment would cause schism. They also threatened to seek leadership from overseas for dissenting churches within Southwark diocese.

"This is agonising news to all those who support this gifted and enlightened cleric" LGCM said in a statement. "His appointment to Southwark would have brought with it compassion, enormous expertise and wisdom. The diocese is the worse off because of this sad decision to remove Jeffrey John from the shortlist."

LGCM said it was "saddened" by the way the Crown Nominations Commission "has appeared to cower and backtrack in the face of those homophobic elements within the Church of England opposed to progress towards inclusion and equality which are at the heart of the Gospel."

LGCM said it was "deplorable that the God-ordained ministry of Dr John is again questioned and vilified by elements within the Church who fail to demonstrate justice, wisdom or compassion in their attitude."

The Rev Sharon Ferguson said: “Once more the Church of England will be seen to be an anachronism by people who do not understand why Christians appear to be at the vanguard of hatred and homophobia. The Church had an opportunity to consider Jeffrey John on his merits and, whether he had been selected or not, send out a message that the Church of England is a place of welcome and affirmation in the love of God.”